On Thu, 13 Mar 2008 16:01:20 -0400, "Ed Huntress"
wrote:


"Bruce in Bangkok" wrote in message
.. .
On Thu, 13 Mar 2008 02:43:51 -0400, "Ed Huntress"
wrote:


A few years ago I wrote a series of three 5,000-word articles on trade, two
of them exclusively about China, and I spent almost a year researching the
three. One thing I learned then disturbs me now: the prices on goods from
China are artificially high, and have an enormous amount of room on the
downside for re-adjustment, should it become necessary for them. I don't
know how that situation is viewed now, by the people who really know those
things, but I doubt if it has changed. This suggests to me that small
changes at the margins are not going to result in a qualitative change in
our trade situation. Without that, we have to find another way to get out of
the debt-financed economy we're in, and I have no idea what the prospects
are for that.


Based on living in Asia for some forty years and being married into a
fairly extensive family of Thai Chinese I can say that the economic
theory driving the Chinese is "sell it but get the most you can for
it". Normally prices are determined by how much the buyer will pay
So I would assume that current Chinese prices are somewhat higher then
the rock bottom, can't sell it for that, price. One way to prove, or
disprove that thesis would be to track Harbor Freight prices with an
allowance for increases in container shipping costs. I don't know, but
I suspect that the dollar price will stay about the same as before the
fall of the dollar.

What appears, from this distance, to ba the largest problem is the
transfer of basic industries to overseas sources. CNC machines, for
example. do they make any in the U.S. ? Where does iron and steel come
from these days? Even when I still lived there the Japanese were
selling steel, FAS San Diag o for less then Lone Star Steel could
produce it.

One of the biggest problems is that it is so easy to see what is wrong
but so difficult to offer a solution that is acceptable to, even the
ones most effected.

Tell Ohio that the answer is to cut taxes, give a 5 year moratorium on
business taxes, guarantee a maximum wage and a compliant labor force
and offer cheap power and see what they say. But Singapore did exactly
that.


Bruce-in-Bangkok
(correct email address for reply)